Deloitte: Why chief transformation officer is a key hire

A transformation nerve centre (TNC) is critical for a high performing office as it creates visibility, intensity and accountability providing that competitive business edge, according to Deloitte. 

A new report from consultants Deloitte explores the role of the TNC, what it takes to execute a complex enterprise-wide program that delivers results, and why the appointment of a chief transformation officer is crucial for future success.

According to the report titled 'What it takes to execute large-scale and lasting transformations', a TNC is chartered with comprehensively managing the planning, execution and the outcomes of digital industrial transformation. 

“The sheer complexity, scope and ambiguity of transformation requires dedicated capabilities to architect the transformation, orchestrate across multiple intersecting threads of work and track progress against goals," comments Deloitte. “The TNC creates visibility, intensity, and accountability, cornerstones of successful transformations.”

The report says a TNC should house capabilities critical to the transformation under unified leadership with a focus on the three pillars of; architecting, orchestrating and governing the transformation.

“Leaders can design a centre to overcome some of the most common reasons transformations fail, including employee resistance, inadequate sponsorship, and poor project management.”

According to Deloitte, a comprehensive digital industrial transformation requires the implementation of strong and dedicated TNC capabilities – which should have the following five characteristics:

1. Enterprise wide Affect not only operations but the talent and underlying technology reimagining the enterprise from end-to-end.
2. Business or enterprise model impact Includes a redesign of the enterprise operating model and expands on business models.
3. CXO-Driven Led by a C-suite member employing a top-down approach to critical decision-making.
4. Multifunctional Cuts across the enterprise from functions to business units and regions.
5. Exponential change Scale with sizeable gains in revenue, margin, experience and/or business velocity rather than delivering incremental change.

Seven characteristics of a high-performing TNC

“Once the goals of the transformation - how wide, how fast, how different - have been established and communicated, the most critical element of executing successful transformations is the team itself, beginning with the TNC,” points out the report.

“Our experience shaping and supporting end-to-end transformations has helped uncover, specifically, seven characteristics that characterise high-performing TNCs:

● Cross-functional – representation across business functions, product lines and regions

● Independent – authority to make rapid decisions that shape the transformation strategy

● Dynamic – shifting composition of the team based on transformation phase

● Bold – willingness to make tough decisions – even with ambiguity

● Communicative – transparent and frequent information-sharing with all stakeholders

● Externally supported – inclusion of outside expert to offer balance perspective

● Innovative – use of technology throughout the program

What is the value of a chief transformation officer?

Deloitte sees the need for accountable and effective leadership at the helm of this digital transformation. “The appointment of a CTrO can send positive market signals, help ensure that transformation doesn’t overwhelm other executives and allow the cultivation of transformation-specific skill sets.”

Deloitte point out transformation leaders should have five essential qualities which include: 

● Bandwidth to fully commit to the demands of a digital industrial transformation 

● Deep understanding of the company’s customers, markets and operations 

● Risk appetite to take on challenges and stick to the goals of the transformation 

● Authority to make transformation-related decisions in partnership with the CEO

● Influence with other executives so that decisions are implemented effectively

“A strong TNC can be instrumental in architecting, orchestrating, and tracking the transformation journey, and helping companies achieve their transformation ambitions and outcompete the market,” concludes Deloitte.